OUR. Sustainability. To deliver essentials for a better life Sustainability Report

Transcription

1 OUR Sustainability To deliver essentials for a better life 2017 Sustainability Report

2 Kimberly-Clark's vision to lead the world in essentials for a better life is at the heart of our business. Contents Welcome to our Sustainability Report Sustainability 2022 Overview Progress Dashboard 7 Priority Topics Social Impact 11 Forests & Fiber 14 Waste & Recycling 18 Governance 38 Materiality Assessment, 44 Report Development and Stakeholder Engagement GRI Index 46 External Principles, 59 Memberships and Awards Independent Assurance 68 Statement Energy & Climate 22 Supply Chain 28 2 Kimberly-Clark 2017 Sustainability Report

3 Welcome to Our 2017 Sustainability Report A MESSAGE FROM THOMAS J. FALK In the second year of our Sustainability 2022 program, excellent progress has been made, and I am pleased to share our results and some of the stories from our teams in this year s report. This program represents an ambitious set of goals for how we will have a lasting impact on the people we serve around the globe and the communities we touch. We continued to make strides in our efforts to create positive social and environmental change. Thus far, we have improved the well-being of 4.3 million people in need with powerful brand programs like No Baby Unhugged, Touch of White Angels and Toilets Change Lives. We also took steps to ensure that the essential products consumers trust are manufactured responsibly. Our commitment to purchase one million megawatt hours of renewable wind energy in the United States puts us on track to surpass our climate and energy goals and provides a financial benefit for our company. In addition, we introduced an innovative water risk dashboard in Colombia to protect access to water for our mills and the communities where they are located. Across our business, we continue to extend our zero-waste mindset. We are committed to eliminating waste in our processes, products and packaging, while also exceeding our consumers expectations for safe and effective products. In 2017, we diverted 95% of facility waste from landfills. And our programs for post-consumer waste are gaining traction. I appreciate the work of our dedicated employees around the world and our many partners to advance our vision to lead the world in essentials for a better life. From creating trusted brands to leading great programs that improve people s lives and support a healthy planet, we are building a positive sustainability legacy. Thomas J. Falk Chairman and CEO Watch Our 2022 Strategy message from Tom Falk (Chairman and CEO) 3 Kimberly-Clark 2017 Sustainability Report

4 A MESSAGE FROM lisa morden Kimberly-Clark s Sustainability 2022 strategy represents our company s most ambitious goals to date. And two years into our seven year plan, I m impressed by the work of our people, and the cumulative impact of these programs. We continue to challenge the traditional ways of thinking about sustainability, safety, human rights and our supply chain to map new paths that help Kimberly-Clark reach its goals. I m proud to share that we exceeded the 2017 targets in four of our five programs: Social Impact: Our programs have helped improve the lives of 4.3 million people in need since we launched our Sustainability 2022 strategy. We re focused on improving access to sanitation, helping children thrive, and empowering women and girls, and we re bringing our customers and consumers on the journey to address these important issues. Waste and Recycling: In addition to our successful efforts to reduce manufacturing waste, we made good progress toward the difficult challenges associated with post-consumer waste. Our teams are adopting circular design principles, such as net weight basis reductions and material innovations, which keep post-consumer waste from low value disposal outlets to higher value, beneficial uses. And we are exploring new business models and partnerships that can propel us forward in this area. Energy and Climate: In addition to a significant investment in new wind energy projects in U.S., we deployed more than 170 energy conservation programs in 2017 (more than 350 since 2015). We also took steps to calculate and validate our first Scope 3 emissions inventory, setting us on a path to surpass our climate goal four years early. Supply Chain: Water is a critical input to our business, and a vital resource for the communities where we operate. That s why we expanded our focus from reducing water consumption to open collaboration with local community stakeholders and non-government organizations to improve conditions in water-stressed locations. In 2017, we partnered to develop a dashboard to monitor local freshwater supplies and consumption trends in order to generate actionable insights on risks at the watershed level. For nearly 150 years, our values of authentic, accountable, innovative and caring have been at the core of our business. These values ensure we respect each other and our planet to help create positive social and environmental impact. The results outlined in this report are a testament to the hard work and creativity of our people who live out these values every day. Lisa Morden Vice President Safety and Sustainability Through our Sustainability 2022 program, we are creating value for our business and our stakeholders from the sourcing of our materials, right through to the shelf and beyond. This report reflects Kimberly-Clark s 15th annual update on our progress on key sustainability topics, brought to life through the stories and experiences of Kimberly-Clark teams around the world. It spans the timeframe from January 1 through December 31, 2017 (with historical data also reflected), and was prepared in accordance with the Global Reporting Initiative (GRI) s Sustainability Reporting Standards Core level. For questions or comments regarding the content of this report, please contact us at sustainability@kcc.com. 4 Kimberly-Clark 2017 Sustainability Report

5 SUSTAINABILITY 2022 OVERVIEW programs are designed to create social, environmental and business value. Our Sustainability 2022 strategy was built with a collaborative process involving business leaders and external stakeholders from around the world. For additional details, please visit the Materiality section. The sustainability materiality assessment results inform our sustainability strategies and ensure we provide transparent, comprehensive and accessible coverage of topics that are of significant importance to key stakeholders and reflect the organization s significant economic, environmental and social impacts. These priorities build on the strong foundation and lessons learned from our previous plans, while enabling a focus on those that will create more long-term value and positive impact. 5 Kimberly-Clark 2017 Sustainability Report

6 Sustainability 2022 (continued) O S at y INNOVATIOn We work together to foster innovative ideas and pursue long-term change COMMITmENt Our priorities and goals are informed by WHO we serve, WHAT we do and HOW we do it ValUE We strive to create social, environmental and financial value O P or еs O 2022 SOCIAL IMPACT Improve the well-being of Innovate our to tissue reduce products natural forest their footprint by 25M 20% extend our G zero people IN NEED FORESTS & FIBER 50% By 2025 WASTE & RECYCLING waste MINDSET ENERGY & CLIMATE Reduction in greenhouse gases SUPPLY CHAIN UPHOLD our COMMITmENt TO HUMAN RIGHTS, WORKER SAFeTY, ANTI-CORRUPTION and environmental protection 6 Kimberly-Clark 2017 Sustainability Report

7 2017 PROGRESS DASHBOARD annual targets ensure Progress towards our 2022 goals. 7 Kimberly-Clark 2017 Sustainability Report

8 2017 PROGRESS DASHBOARD 2017 was the second year of our Sustainability 2022 strategy and we made good progress as we began to tackle the challenges associated with our new goals. Highlights OVERALL Performance $18.3 billion in Net Sales Exceeded 4.3 million lives impacted target through social programs 89% Environmentally-preferred Fiber (EPF) in our tissue products diverted of manufacturing 95% waste landfill from Awarded 5 th consecutive EPA SmartWay transportation award Global Total 0.19 Reportable Incident Rate of Total global donations and community investments $26 million We ve increased the amount of FSC certified virgin fiber in our tissue products from 7% to more 84% than in 2006 in 2017 diverted more than 15,500 MT OF PCW Reduced absolute GHG emissions by 18% from a 2005 baseline Watershed analysis initiated at 5 12 water-stressed of operations 8 Kimberly-Clark 2017 Sustainability Report

9 2017 PROGRESS DASHBOARD (continued) On-Target Off-Target 2022 Goal 2017 Target 2017 Actual 2017 Performance Improve the lives of 25 million people in need 3M 4.3M 50% reduction -25% -29% in natural forest fiber use Avoid landfilling 10,400 15,543 of 150,000 MT of product and packaging material post-use Metric Tons Metric Tons 20% reduction -17% -18% in greenhouse gas emissions 5 5 Watershed Analysis targets completed mill assessments initiated but still in progress 9 Kimberly-Clark 2017 Sustainability Report

10 Business Data FINANCIALS Net income ($B) Net sales ($B) Net sales by division ($B)1 Personal Care Consumer Tissue K-C Professional Net sales by region ($B) North America Outside North America 4 N/A N/A N/A N/A N/A N/A N/A 9.2 Europe N/A Asia, Latin America and Other N/A Intergeographic (Asia, Latin America and Other)1 2 (0.7) (0.8) (0.4) (0.3) (0.4) (0.4) (0.3) (0.3) Operating costs ($B) Cash returned to shareholders ($B) Income taxes paid ($B) Total environmental expenditures ($M) Capital O&M Government payments and R&D Assets ($B) Donations and community investments ($M) Percent of net income1 1.1% 2.0% 1.8% 1.7% 2.3% 2.9% 1.3% 1.1% (1) Recast from discontinued operations. (2) Intergeographic refers to inter-company sales. (3) Total environmental expenditures were restated for 2014 to be consistent with prior years to not include equity company numbers. Totals for 2014 exclude equity companies and Health Care facilities. (4) In 2017, began reporting net sales as North America and Outside North America to align with 10-K financial reporting. 10 Kimberly-Clark 2017 Sustainability Report

11 Priority topic: SOCIAL IMPACT DELIVERING ESSENTIALS FOR A BETTER LIFE through our products and our programs. We deliver essentials for a better life to nearly one-quarter of the world s population every day through products from our leading brands like Kleenex, Huggies, Kotex and Depend. Our program focuses on: Extending our brand leadership beyond functional and emotional benefits to deliver social benefits GOAL(S) Improve the well-being of 25 million people in need through social and community investments that increase access to sanitation, help children thrive and empower women and girls. HOW IMPACT IS ACHIEVED AND MEASURED Support the communities in which we operate through company and employee giving and volunteerism. Align programs to the promise of our brands to create sustainable social impact, increase brand equity and performance at shelf, and deliver supply chain benefits. Measure the business and social impact with key performance indicators and use learnings to scale the programs that are most impactful. (Note that we consider people in need as those living in poverty, where poverty is not only economic but also social, political and cultural). 11 Kimberly-Clark 2017 Sustainability Report

12 Priority topic: SOCIAL IMPACT (continued) 2017 PROGRESS We continued to invest in several social impact programs through community engagement and our major brands, often encouraging customer participation. Social impact programs: Toilets Change Lives: Scaled commercial activations into 15 markets to help provide clean access to sanitation to those in need. Access to sanitation No Baby Unhugged: Whether it's helping to start volunteer hugging programs at hospitals, providing special diapers for micro preemie babies, or donating diapers to babies in need, the No Baby Unhugged program ensures that all babies receive the hugs they need to thrive. Empowering Women and Girls: In Bolivia, we are helping empower girls through Helping children thrive our Kotex brand in partnership with developing access to sanitation facilities. We are creating long-term Social Impact programs that deliver on the promise of our brands and also improve the well-being of people in need. We can simultaneously make lives better while building equity in our brands. Initiatives were focused in the following three areas: Empowerment of women and girls 770,000 lives impacted 1,390,000 lives impacted 62,000 lives impacted We set a goal to have a positive social impact on cumulative three million lives in 2017, and are proud to report we exceeded this target. In order to achieve our 2022 target of 25 million, we need to scale more rapidly, innovate new programs in our supply chain and begin to assess social impact as part of our environmental programs. Total lives improved towards 2022 goal: 4,300,000 COMMUNITY AND EMPLOYEE CONTRIBUTIONS ($ MILLION) Community Partners grants to U.S. employee-chosen charities Value of matching gift contributions made by U.S. employees Value of product donations Global cash donations Total global (product and cash) donations Employee giving U.S. employee volunteer hours 78,000 84,000 77,430 80,571 80,074 75,356 41,993 86, Kimberly-Clark 2017 Sustainability Report

13 Priority topic: SOCIAL IMPACT (continued) Toilets Change Lives GLOBAL In 2017, Kimberly-Clark scaled commercial activations into 15 markets to help bring clean access to sanitation to those in need through our brands Scott, Andrex, Neve, Hakle and Suave. Including activations in Angola, Bangladesh, India, South Africa, Brazil, Bolivia, Peru, Guatemala, Honduras and Nicaragua. Read more about Toilets Change Lives A Period Shouldn't Stop a Girl's Progress LATIN AMERICA In Bolivia, we are helping empower girls through our Kotex brand to be able to stay in school through safe access to sanitation facilities. We partnered with Plan International on the #EsosDiasDelMes (Those Days of the Month) program to help girls and women manage their periods so they can pursue the future they deserve. Read more about the program No Baby Unhugged NORTH AMERICA A hug is a powerful thing The No Baby Unhugged program leverages the benefits of touch by using volunteer cuddlers to hold infants when parents and family members are not available. Our diaper bank networks help ensure families in need have access to daily essentials like diapers and wipes. It s all about what s best for baby giving them the human contact and innovative products they need to help develop into happy, healthy kids. Read more about the program Expanding Toilets Change Lives in Latin America LATIN AMERICA The Toilets Change Lives program first launched in Bolivia in 2015 to improve and expand access to sanitation and to help fund community education programs on water, sanitation and hygiene. It has since expanded into Peru and, in 2017, Guatemala, Honduras and Nicaragua. To date it has helped more than 37,000 people in need and benefited local communities and schools. Read more about the program 13 Kimberly-Clark 2017 Sustainability Report

14 Priority topic: FORESTS & FIBER REDUCING OUR IMPACT ON FORESTS THROUGH INNOVATION AND RESPONSIBLE SOURCING. We protect forests to address climate change, conserve terrestrial biodiversity and ensure a resilient, healthy supply chain. We are proud that major environmental groups, including Greenpeace, FSC and the World Wildlife Fund, have recognized Kimberly-Clark as a market leader for responsible fiber sourcing and forest protection and we are committed to drive further improvements.. Our program focuses on: Extending our leadership through natural forest fiber substitution and EPF in our tissue products. Expanding our responsible sourcing practices to fiber-based packaging. Engaging customers and consumers through brand-led commercial programming, retail execution and partnerships. 14 Kimberly-Clark 2017 Sustainability Report 2025 GOAL(S) Innovate our tissue products to reduce THEIR NATURAL FOREST FOOTPRINT BY 50% while increasing our use of environmentally-preferred fibers (EPF) by HOW IMPACT IS ACHIEVED AND MEASURED Continue to source 100% virgin wood fiber for our products from certified sources and apply the same objective to fiber-based packaging by Reduce the use of wood fiber sourced from natural forests* by 50% and increase use of environmentally-preferred fiber (EPF)* to 90% in our global tissue products by Deliver sustainable alternative fiber innovation to reduce our use of fiber sourced from natural forests. Support the Consumer Goods Forum commitment to zero net deforestation by * Environmentally-preferred fibers (EPF) include Forest Stewardship Council -certified virgin fibers, recycled fibers and sustainable alternative natural fibers in tissue products. Natural forests are composed of native species that selfregenerate and contain key elements of native ecosystems such as wildlife and biological diversity. To us, this primarily includes boreal fibers known as Northern Bleached Softwood Kraft (NBSK).

15 Priority topic: FORESTS & FIBER (continued) As one of the world s largest buyers of market pulp, we know that protecting forests is critical to creating a resilient supply chain for our products. Sustaining this natural resource through responsible forestry is just one of the ways we care for the planet and help lead the world in essentials for a better life. Also by having the Forest Stewardship Council (FSC ) trademark on packaging for products like Kleenex, Cottonelle, Andrex and Scott, we re using the strong reputation of our brands to raise awareness of responsible forestry around the world PROGRESS We have reduced our use of fiber from natural forest landscapes by 29% over the 2011 base year by using more fiber sourced from plantations as opposed to natural forest fiber. In addition, 89% of the fiber used in our tissue products was from environmentally-preferred sources. The competitive landscape within the pulp supply chain will continue to be a challenge for our business, but we are working with our NGO and supplier partners to help prevent deforestation and ensure responsible forestry management moving forward. We are evaluating the working forest model to balance long-term conservation/restoration with sustainable wood supply in forests with high landscape connectivity, terrestrial and freshwater biodiversity, and climate resilience potential. We are continuing the challenging work of developing alternatives to traditional sources of fiber for our products while encouraging our suppliers and customers/ consumers to seek FSC certification. Read more about our partnership with FSC. All virgin fiber sourced in 2017 in our products was from suppliers certified to one of the five forest management certification systems recognized in our fiber procurement policy. TOTAL FIBER USE (MILLION MT) Virgin Fiber % of total 72.5% 70.3% 71.3% 71.4% 72.3% 73.5% 76.6% 76.5% Recycled Fiber % of total 27.5% 29.7% 28.7% 28.6% 27.7% 26.5% 23.4% 23.5% Total fiber used (1) As part of our 2011 global GF&TN agreement with WWF, we will report our total use of environmentally-preferred fiber for all fiber-containing products. Virgin pulp will include all K-C manufactured pulp, purchased market pulp and third-party contract-manufactured fiber-containing products. FIBER SOURCING BY CERTIFICATION TYPE (%) Virgin fiber from environmentally responsible sources1 98% 100% 100% 1 100% 100% 100% 100% 100% Forest Stewardship Council (FSC) 39% 47% 53% 61% 62% 64% 67% 71% Sustainable Forest Initiative (SFI) 31% 30% 32% 24% 24% 23% 22% 21% Program for the Endorsement of Forest Certification (PEFC) 8% 6% 5% 4% 4% 3% 2% 2% CERFLOR (Brazil) 8% 3% 2% 0% 0% 0% 0% 0% Canadian Standards Association (CSA) 7% 5% 5% 6% 7% 7% 5% 4% Forest Stewardship Council Controlled Wood (FSC-CW) 5% 8% 2% 6% 4% 3% 4% 2% Not Certified 2% 0% 0% 0% 0% 0% 0% 0% (1) Approximately 150 tons of fiber was not certified in 2012; due to rounding, this is not reflected. CHLORINE FREE WOOD PULP PURCHASES Elemental Chlorine Free (ECF) 95% 95% 98% 98% 97% 97% 98% 98% Total Chlorine Free (TCF) 5% 5% 2% 2% 3% 3% 2% 2% 15 Kimberly-Clark 2017 Sustainability Report

16 Priority topic: FORESTS & FIBER (continued) Engaging Consumers to help save the World s Forests NORTH AMERICA Through a three-year effort with World Wildlife Fund (WWF), we are raising consumer awareness about the importance of choosing towel and tissue products made with fiber from responsibly managed forests certified to the Forest Stewardship Council (FSC ) standard. Our new Heart Your Planet campaign features WWF s iconic logo on Kimberly-Clark s North American tissue products that are FSC -certified, including Kleenex facial tissue, Scott paper towels, Viva paper towels and Scott and Cottonelle bath tissue sold in North America. We will also support WWF s efforts to protect forests and other critical ecosystems. Read more about the program Kimberly-Clark Receives first Enhanced Green Label in Singapore APAC In 2017, we were proud to become the first company to be certified under the Singapore Environment Council s new, stricter green label program. To receive this certification, companies selling paper and tissue products must show that their suppliers are following responsible forestry practices including water use, fire management, and the protection of biodiversity on peat lands. Read more about the program Reduced fiber SOURCED FROM natural FORESTS BY 29% from 2011 base year INCREASED USE OF ENVIRONMENTALLY- PREFERRED FIBERS to 89% in our tissue products 16 Kimberly-Clark 2017 Sustainability Report

17 Priority topic: FORESTS & FIBER (continued) ENVIRONMENTALLY-PREFERRED TISSUE FIBER (%; GLOBAL) Environmentally-Preferred Fiber 65% 74% 78% 83% 84% 86% 89% 89% Virgin Fiber FSC Mix 33% 39% 44% 50% 52% 55% 61% 61% FSC Plantation2 29% 33% 38% 42% 43% 44% 49% 50% FSC Controlled Wood 31% 26% 22% 17% 15% 14% 11% 8% Recycled Fiber Recycled content 32% 35% 34% 33% 32% 31% 28% 28% Post-consumer recycled content3 13% 14% 14% 14% 14% 13% 13% 13% (1) Data represents Kimberly-Clark and equity affiliates. (2) FSC Plantation is a subset of FSC Mix. (3) Post-consumer recycled content is a subset of Recycled content; Post-consumer recycled content reported for North America and Europe only. ENVIRONMENTALLY-PREFERRED TISSUE FIBER (%; NORTH AMERICA) Environmentally-Preferred Fiber 57% 63% 74% 79% 81% 84% 87% 86% Virgin Fiber FSC Mix 32% 37% 44% 51% 53% 56% 59% 60% FSC Plantation2 26% 30% 34% 38% 39% 40% 40% 41% FSC Controlled Wood 43% 36% 27% 21% 20% 16% 14% 14% Recycled Fiber Recycled content 25% 26% 30% 28% 28% 28% 28% 26% Post-consumer recycled content3 20% 23% 26% 23% 23% 26% 26% 24% (1) Data represents Kimberly-Clark and equity affiliates. (2) FSC Plantation is a subset of FSC Mix. (3) Post-consumer recycled content is a subset of Recycled content. NATURAL FOREST FIBER USE (MT) Virgin fiber from Natural Forest sources (Northern Softwood) 756, , , , , , ,644 Reduction in Natural Forest Fiber N/A 1 24% 24% 24% 25% 26% 29% (1) 2011 is the Base Year for 25% Reduction Target by Kimberly-Clark 2017 Sustainability Report

18 Priority topic: WASTE & RECYCLING THINKING DIFFERENTLY ABOUT WASTE. We understand the value of materials in our product categories and seek secondary, beneficial uses of these materials from source to shelf and beyond. Our program focuses on: Utilizing materials efficiently in product and packaging design and manufacturing. Diverting manufacturing and postconsumer waste from low value outlets (landfill) to higher value, beneficial uses. Improving consumer education related to disposal and recycling options. Finding innovative ways to enable value networks that are mutually beneficial to us and our partners. Researching material and technology innovations to help us deploy more circular business models GOAL(S) EXTEND OUR ZERO WASTE mindset across the value chain and deliver innovation to help keep product and packaging material out of landfills. HOW IMPACT IS ACHIEVED AND MEASURED Adopt circular design principles such as material innovations that keep post-consumer waste out of landfills and in the value chain. Seek to increase our net recycling value in our operations by 10% every year while avoiding landfilling of facility waste. Identify and deploy solutions to avoid 150,000 MT of finished product and packaging from being landfilled after use. 18 Kimberly-Clark 2017 Sustainability Report

19 Priority topic: WASTE & RECYCLING (continued) Recycling Product Dispensers to Create Circular Business Model LATIN AMERICA Our team in Brazil saw dispenser waste as a valuable opportunity to create a circular business model. Pieces from the old dispensers could be reused in future products or materials could be recycled. This not only reduces waste and the need for new raw materials; it also saves us money. Read more about dispenser recycling Helping Combat Waste with Compostable Products NORTH AMERICA To share our knowledge around composting, we teamed up with the Keep America Beautiful Recycling@Work initiative to support workplace efforts to reduce waste and improve recycling. One of the results of this partnership is a workplace guide to composting. Read more about this composting program 2017 PROGRESS In 2016, we expanded our manufacturing waste program from our operations to include boiler ash, de-inking trasher rejects, and construction and demolition debris from regular maintenance activities. Our waste program references the UL Environment Zero Waste to Landfill standard to include all waste materials generated at both manufacturing and non-manufacturing facilities. Under this new definition of waste, we achieved our 2017 target of diverting 95% of our manufacturing waste from landfill. We also achieved our post-consumer waste target of 10,400 metric tons (MT) in 2017 by diverting more than 15,500 MT of used product and packaging from landfill. This was achieved with innovative programs like design for reduction and post-consumer waste solution programs on products and packaging. 19 Kimberly-Clark 2017 Sustainability Report Waste programs: The RightCycle Program: Expansion of our recycling program for non-hazardous lab, cleanroom and industrial waste that provides a simple solution for recovering and recycling apparel, gloves and safety eyewear into alternative beneficial use products. Dispenser Recycling: Launched recovery program in Brazil to reuse old dispenser materials into new dispenser production. Fiber Recovery: Developed a circular program at our Italy mill to recover fiber from the water treatment plant and reuse it as a raw material in paperboard packaging. Workplace Guide to Composting: Created a composting guide that can be applied with our Kimberly-Clark Professional* hand towel products. Packaging Innovation: Deployed flexible film reduction in the United Kingdom and packaging waste stream optimization in India. These programs build upon our work with How2Recycle in the U.S., REDcycle in Australia and On-Pack Recycling Label in the U.K. Waste Paper Recovery: Created a waste paper recovery program in Peru to improve local recycling, incorporate more recycled fiber into our products and generate funds to support SOS Children s Villages. Diverted 95% OF Facility waste from LANDFILL

20 Priority topic: WASTE & RECYCLING (continued) NON-HAZARDOUS MANUFACTURING WASTE (% OF TOTAL NON-HAZARDOUS WASTE) Landfilled 19.1% 24.5% 22.0% 19.2% 16.2% 7.6% 5.6% 4.7% Recycled 18.5% 17.6% 20.2% 19.6% 18.3% 20.3% 20.6% 21.7% Alternative daily cover, mine reclamation and liquid solidification 24.1% 22.5% 25.9% 29.2% 34.1% 40.0% 52.0% 51.5% Converted to energy 20.3% 20.4% 12.4% 12.2% 12.2% 12.7% 14.4% 14.1% Reused 12.1% 13.3% 17.8% 18.1% 17.2% 16.7% 5.0% 5.5% Composted 5.0% 1.1% 0.9% 0.9% 1.2% 2.0% 1.6% 1.8% Incineration without heat recovery 0.8% 0.5% 0.9% 0.8% 0.7% 0.7% 0.8% 0.5% Other3 N/A N/A N/A N/A N/A N/A 0.2% 0.1% Total non-hazardous waste (million MT) (1) At Kimberly-Clark, all waste data is collected by mass except a portion of liquid waste which is collected by volume in liters with a conversion factor of 1 liter = 1 kilogram. (2) In 2016, our manufacturing waste program was expanded referencing the UL Environment Zero Waste to Landfill standard to include all wastes and recyclable materials generated at both manufacturing and non-manufacturing facilities and the disposition of those materials. Our non-hazardous manufacturing waste data was updated per our annual review process. (3) Other includes miscellaneous, alternative disposal methods and was separated from Reuse in HAZARDOUS MANUFACTURING WASTE (% OF TOTAL HAZARDOUS WASTE) Biological treatment 0.8% 0.0% 0.1% 0.0% 0.1% 0.3% 0.7% 0.9% Recycled 50.2% 46.2% 13.8% 12.9% 12.3% 22.6% 19.9% 11.6% Incineration without heat recovery 25.6% 26.2% 14.3% 28.1% 38.0% 36.3% 29.4% 21.6% Chemical treatment 15.8% 15.2% 44.1% 36.5% 36.7% 26.6% 25.3% 4.6% Surface impoundment 0.0% 7.8% 10.2% 0.0% 0.0% 0.0% 0.0% 0.0% Thermal treatment 5.0% 1.4% 3.7% 7.9% 2.0% 0.6% 0.1% 2.6% Permanent storage 0.0% 0.0% 1.7% 0.7% 0.4% 0.5% 0.3% 0.0% Landfilled 1.8% 0.6% 2.9% 3.2% 4.4% 6.8% 10.7% 7.8% Blended fuel 0.8% 2.5% 9.2% 10.7% 6.1% 6.3% 10.8% 2.2% Deep well injection 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Mandated Waste 3 N/A N/A N/A N/A N/A N/A 2.3% 48.6%3 Total hazardous waste (kg) 226, , , , ,266 1,326,463 1,019,980 1,726,829 (1) At Kimberly-Clark, all waste data is collected by mass except a portion of liquid waste which is collected by volume in liters with a conversion factor of 1 liter = 1 kilogram. (2) In 2016, our manufacturing waste program was expanded referencing the UL Environment Zero Waste to Landfill standard to include all wastes and recyclable materials generated at both manufacturing and non-manufacturing facilities and the disposition of those materials. Our hazardous manufacturing waste data was updated per our annual review process. (3) The 2017 increase in Mandated Waste was driven due to the government-required disposal of asbestos at one of our facilities. 20 Kimberly-Clark 2017 Sustainability Report

21 Priority topic: WASTE & RECYCLING (continued) MANUFACTURING WASTE EFFICIENCY Waste per metric ton of production (MT/MT of production) MATERIALS CONSUMPTION AND PRODUCTION Total production volume (million MT of production) Materials used (million MT) Virgin fiber Recycled fiber Polymers Packaging Adhesives Polymer-based components TOTAL FINISHED PRODUCT AND PACKAGING WASTE DIVERTED FROM LANDFILL 1 (MT) Waste Diversion Post-Consumer Waste Solutions 3,405 10,587 Waste Avoidance Design to Reduce 1,850 4,955 Total 5,254 15,543 (1) Tonnages reported are built from cumulative waste diverted from landfill towards the 150,000 MT target. 10,587 MT WASTE DIVERSION POST-CONSUMER WASTE SOLUTIONS+ 4,955 MT Waste Avoidance Design to Reduce = 15,543 MT total FINISHED PRODUCT AND PACKAGING Waste diverted from landfill 21 Kimberly-Clark 2017 Sustainability Report

22 Priority topic: ENERGY & CLIMATE increasing our energy efficiency While seeking lower carbon solutions. We deploy energy conservation and alternative energy programs to minimize climate change impacts, reduce greenhouse gas (GHG) emissions from our operations and transform our financial performance. Our program focuses on: Reducing our GHG emissions from our direct emissions from operations ( Scope 1 ) and our indirect emissions from utility suppliers ( Scope 2 ). Measuring GHG emissions from our upstream and downstream supply chain ( Scope 3 ). For additional information, see 10-K or Proxy Statement GOAL(S) 20% REDUCTION in absolute greenhouse gases versus a 2005 baseline. (Note: Modeling using the Science-Based Targets Initiative s Sectoral Decarbonisation Approach validates that this target is aligned with climate science and is science-based ). HOW IMPACT IS ACHIEVED AND MEASURED Energy Conservation: Reduce greenhouse gas emissions and total delivered costs through LEAN Energy deployment and energy efficiency standard practice adoption across our operations. LEAN Energy engages employees in a culture of conservation to execute process changes which optimize energy efficiency. Alternative Energy: Create a step change reduction in greenhouse gas emissions and energy cost by switching to lower carbon emitting fuels (e.g. gas, biomass and renewable energy). Energy Supply: Manage energy supply to optimize price and cost predictability across our operations. 22 Kimberly-Clark 2017 Sustainability Report

23 Priority topic: ENERGY & CLIMATE (continued) 2017 PROGRESS Our 2017 target was to reduce our Scope 1 and 2 absolute greenhouse gas (GHG) emissions by 18% over our 2005 baseline. Through deployment of our energy conservation and alternative energy programs, we achieved this goal and our cost savings targets. In 2017, we announced two renewable energy wind power agreements to purchase approximately 1,000,000 megawatt hours (245 megawatts MW) of electricity annually from new projects in Texas and Oklahoma. The long-term power purchase agreements (PPA) include wind energy from the Rock Falls Wind project in Northern Oklahoma, being developed by EDF Renewable Energy, and the Santa Rita Wind Energy Center in West Texas, being built by Invenergy. The Rock Falls Wind project became operational at the end of 2017, and the Santa Rita facility is expected to begin commercial operation by the second quarter of The renewable energy supplied by the wind farms is equivalent to about one-third of the electricity needs of Kimberly-Clark s North American manufacturing operations, and will enable the company to reduce its greenhouse gas emissions by up to 550,000 metric tons annually. This is equivalent to removing 116,178 passenger vehicles from the road. OTHER ENERGY PROGRAMS 1) Alternative Energy Fuel switching with natural gas at our Chester, Pennsylvania facility to lower carbon emissions. Announced two co-generation projects at our company s Mobile, Alabama and Puenta Piedra, Peru manufacturing facilities due to start-up in These accompany six large-scale electricity co-generation facilities with waste heat recovery. Four biomass thermal energy generating plants that provide steam for our company s tissue operations. 2) Energy Conservation Deployment of 174 Energy Conservation projects in 2017 (more than 350 since 2015). 3) LEAN Energy Expansion of our LEAN Energy Management System at 35 of our manufacturing sites globally. Through these efforts we achieved our reduction target with an absolute reduction in GHG emissions by 18% from a 2005 baseline. SCOPE 3 GHG EMISSIONS We partnered with World Resource Institute and WWF to measure our Scope 3 emissions, and learned that the majority of these emissions are found in three areas: purchased goods and services, transportation and distribution, and post-consumer waste. Our Scope 3 program, designed to improve our product carbon footprint, will help us create greater efficiencies in our value chain and further deliver on our vision to lead the world in essentials for a better life. GHG Emissions 18% Absolute Reduction DRIVING INNOVATION IN ENERGY MANAGEMENT TO CREATE VALUE AND REDUCE GHG EMISSIONS. S2022 GHG Reduction Glidepath by Strategy 40% 35% % Reduction vs 2005 baseline 30% 25% 20% 15% 10% 20% GHG Reduction Goal 11% 12% 5% 11% 0% New Technology Alternative Energy Energy Conservation 23 Kimberly-Clark 2017 Sustainability Report

24 Priority topic: ENERGY & CLIMATE (continued) Powering with Renewable Wind Energy NORTH AMERICA In 2017, Kimberly-Clark announced a commitment to renewable energy with two new wind power agreements to purchase approximately 1,000,000 megawatt hours (245 megawatts MW) of electricity annually from new projects in Texas and Oklahoma. The power purchased will fuel our North American operations. The long-term power purchase agreements (PPA) will enable Kimberly-Clark to reduce its greenhouse gas emissions by up to 550,000 metric tons annually. This is equivalent to removing 116,178 passenger vehicles from the road. Read more about renewable energy Our First Scope 3 Emissions Calculation GLOBAL As part of our global energy and climate goal to reduce greenhouse gas emissions (GHG), we embarked on work to measure and reduce our Scope 3 emissions the indirect emissions that occur both upstream and downstream in our supply chain. Going forward, these learnings will be a foundation for future value stream greenhouse gas emissions reductions. Read more about our emissions-reduction goal Using Innovation to Improve Energy Efficiency NORTH AMERICA AND LATIN AMERICA In 2017, we invested $75 million in the construction of a combined heat-and-power plant to improve the energy efficiency of our Mobile, Alabama, tissue plant; and $8.1 million into our Puente Piedra plant in Peru. These co-generation facilities will improve energy efficiency and will transform the financial performance of the plants. Read more about energy efficiency 24 Kimberly-Clark 2017 Sustainability Report

25 Priority topic: ENERGY & CLIMATE (continued) ENERGY USE (TRILLION BTU) Non-renewable energy % of total 85% 86% 94% 93% 92.8% 93.6% 92.2% 92.4% Renewable energy % of total 14.7% 13.8% 6.2% 7.0% 7.2% 6.4% 7.8% 7.6% Total Energy Use Energy Efficiency (million BTU/MT of production) (1) Our 2017 renewable energy does not include power from the North American purchase power agreements, which will be reflected in the 2018 report. DIRECT ENERGY USE (TRILLION BTU) Natural gas % of total 54.0% 56.8% 73.1% 74.3% 73.2% 75.4% 78.9% 81.1% Purchased biomass, purchased liquor % of total 28.9% 27.0% 8.7% 10.0% 10.9% 9.0% 10.0% 9.5% Coal % of total 14.4% 13.9% 15.8% 13.9% 13.4% 12.7% 11.0% 9.3% Fuel oil % of total 2.4% 2.0% 2.1% 1.7% 1.2% 0.7% 0.2% 0.2% Other 0.2 % of total 0.0 Total Direct Energy use INDIRECT ENERGY USE (TRILLION BTU) Electricity % of total 99.0% 99.2% 99.2% 99.4% 95.1% 94.7% 93.5% 93.3% Steam % of total 1.0% 0.8% 0.8% 0.6% 4.9% 5.3% 6.5% 6.7% Total Indirect Energy use Kimberly-Clark 2017 Sustainability Report

26 Priority topic: ENERGY & CLIMATE (continued) GREENHOUSE GAS EMISSIONS (MILLION MT CO 2 E) 2005 (base year) Direct (Scope 1) Indirect (Scope 2) Total emissions Change from previous year (%) N/A N/A -1.6% -2.4% -2.3% -1.1% -0.1% -7.1% -0.9% CO 2 e per metric ton of production (CO 2 intensity) Specific emissions Carbon Dioxide (CO 2 ) Methane (CH 4 ) Nitrous Oxide (N 2 O) Market-based emissions2 Direct (Scope 1) Indirect (Scope 2) Total emissions Specific emissions Carbon Dioxide (CO 2 ) Methane (CH 4 ) Nitrous Oxide (N 2 O) (1) The U.S. emission factors were based on the 2015 U.S. EPA egrid2012 version 1.0, and the international emission factors used the International Energy Agency Data Services CO 2 Emissions from Fuel Combustion (2013 Edition). Reported CO 2 e emissions are based on location-based emission factors unless noted otherwise. For further details on location or market-based data, please see our CDP Climate Change Investor Response (2) In 2017, Kimberly-Clark began reporting CO 2 e emissions in market-based emission factors in preparation for the 2018 renewable wind electricity PPA in North America. OTHER CRITERIA POLLUTANTS (MT) NOx 3,948 3,833 2,915 2,869 2,895 2,562 2,545 2,453 SO 2 4,193 3,031 2,452 1,787 1,776 1,860 1,689 1,638 (1) 2010 through 2015 pollutant values were revised in 2016 to reflect more accurate data from continuous emission monitors compared to previous report responses which were based only on emission factors. 26 Kimberly-Clark 2017 Sustainability Report

27 Priority topic: ENERGY & CLIMATE (continued) INTERMODAL TRANSPORTATION (NORTH AMERICA) Total Intermodal loads 78,502 87,934 91,353 92,536 95,987 87,517 85,630 79,694 Annual change 22% 12% 4% 1% 4% -5% -2% -9% Miles traveled (millions) Intermodal cost savings ($M) vs. over-the-road truck costs Estimated fuel use (million gallons of diesel) Intermodal Comparable truck-only fuel use Estimated gallons saved Estimated GHG emissions (million pounds Scope 3)2 Intermodal Comparable truck-only fuel use Savings (1) All figures are estimates. (2) Pounds of GHG emissions based on estimate of pounds per gallon of diesel fuel. Note: total truckload volume was lower in 2017 (vs. 2016) by about 5% and that reduction translated into fewer Intermodal shipments SCOPE 3 CALCULATION RESULTS CO 2 E (thousand t/yr) % Category1 Purchased Goods and Services Category 1 7, % Capital Goods Category % Fuel and Energy Related Activities Category 3 1, % Upstream transport and distribution Category 4 1, % Waste generated in operations Category % Business travel Category % Employee commuting Category % Additional Categories (8, 9, 10, 11, 13 and 14) do not contribute to the results 0% End of Life of sold products Category 12 2, % Investments Category % (1) These categories are built referencing the Greenhouse Gas Protocol and supplement to the Corporate Value Chain Accounting and Reporting Standard. Categories left blank are considered non-material to Kimberly-Clark s business. 27 Kimberly-Clark 2017 Sustainability Report

28 Priority topic: SUPPLY CHAIN creating value from source to shelf With a SUSTAINABLE supply chain. We recognize that a sustainable supply chain creates value for our customers, suppliers and us, and minimizes risk to our ongoing business success. Our program focuses on: Social and Environmental Compliance: Working with our mills and key suppliers to meet our standards of performance for human rights, labor rights, employee safety, anti-corruption and environmental protection. Risk Management: Ensuring that the products and materials we purchase come from traceable, resilient and sustainable sources; enabling better prediction and prevention of potential business disruptions, e.g. water security. Value and Innovation: Driving innovation in sustainability by collaborating with our supply chain partners to create value and resilience for Kimberly-Clark and our customers GOAL(S) LIVE OUR VALUES through proactive environmental and social programs. HOW IMPACT IS ACHIEVED AND MEASURED Water: Invest in water treatment and recycling technologies and partner to support communities in water-stressed areas. Corporate Social Compliance: Deploy and improve the social compliance program to monitor facility and key supplier performance to our workplace and human rights standards. Environmental, Health and Safety (EHS): Conduct EHS audits to confirm facility performance against safety and environmental standards and to check the health of our EHS Management System. Supplier Collaboration: Seek value-adding supply partners to create shared value. 28 Kimberly-Clark 2017 Sustainability Report

29 Priority topic: SUPPLY CHAIN (continued) 2017 PROGRESS Water Security Water is one of the world s most vital resources and a key input material to our tissue manufacturing processes. In 2015, we conducted a water risk screening assessment to determine which of our operations are at high risk for water stress, identifying 12 requiring focused attention. Building on our water risk assessment work from prior years, we defined our environmental NGO partners and initiated watershed analyses and target setting for five operations in water-stressed locations. We will continue to conduct these types of water risk screenings and watershed analyses working towards our 12 water-stressed locations by In addition to developing water targets customized to the local situations, we recognize that the communities surrounding mills experiencing water stress will have important social needs as well. Engagement at the local community level is helping to identify appropriate mechanisms to support these needs. Attention is focused on the global risk of water scarcity due to increased demand and the effects of climate change. To address this, in 2017 we partnered with Deltares, an independent research institute and experts in water, to undertake a study where we operate two manufacturing facilities. This study, in-conjunction with local community stakeholders and consultation with government authorities, has led to the development of a new innovative web-based tool called WaterLoupe. The tool will monitor local freshwater supplies and consumption trends, and generate actionable insights to mitigate local water risks. Read more about the WaterLoupe tool Previously, our water security programs focused primarily on water usage, reduction and recycling in our tissue manufacturing facilities. In 2017, in addition to our focus on high risk for water stress, we expanded our program to Personal Care operations. Even with more than 50 new facilities reporting, our total water use was reduced by over two million cubic meters. total water use was reduced by 2m cubic meters PROCESS FRESH WATER USE (MILLION CUBIC METERS) Surface % of total 57% 59% 45% 48% 46% 49% 45% 43% Municipal % of total 29% 26% 38% 34% 30% 30% 34% 35% Groundwater % of total 14% 14% 17% 18% 23% 22% 21% 22% Total water use Change from previous year N/A -1% -16% -11% 0% -2% -0.4% -2.4% PROCESS EFFLUENT DISCHARGE DESTINATIONS (%) Surface 87% 87% 88% 83% 88% 89% 88% 88% Municipal 13% 13% 12% 17% 12% 11% 12% 12% 29 Kimberly-Clark 2017 Sustainability Report

30 Priority topic: SUPPLY CHAIN (continued) UNDERSTANDING WATER STRESS HELPS US DEVELOP TARGETED PLANS FOR OUR MILLS AND THE SURROUNDING COMMUNITIES. S2022 Water Strategy A four-step Process Program Activation Water risk screening Mill water assessment Community stakeholder engagement Watershed Analysis Goal Setting Socio-economic growth assessment Water availability and quality assessment Biodiversity risk assessment Regulatory and policy assessment Establish manufacturing site water use targets and budget Determine mechanisms to reduce overall watershed risk Continuous engagement with strategic partners/ stakeholders to check and adjust the process. Project Implementation Develop, deploy and deliver projects to achieve defined goals 30 Kimberly-Clark 2017 Sustainability Report

31 Priority topic: SUPPLY CHAIN (continued) Water Security in High-Stress locations ASIA PACIFIC Located in a water-stressed region, Kluang, Malaysia Mill experienced a serious drought in 2010 that reduced the river s flow, depleting the community s water supply and causing us to shut down our mill for a prolonged period of time. To do our part in reducing water impacts on the local community, we created a Total Water Solution program. Read more 31 Kimberly-Clark 2017 Sustainability Report

32 Priority topic: SUPPLY CHAIN (continued) 2017 PROGRESS Social Compliance We are committed through our Social Compliance program to work with suppliers to help improve human rights, labor and safety gaps and build capabilities within our supply chain. We are also committed to ensuring that employees around the world including those of our suppliers are treated with respect and that our workplace and human rights standards are met. Our recently launched SupplierLINK Portal provides a clear set of supplier standards and requirements, including our Supplier Social Compliance Standard. This commitment is formalized in our Human Rights in Employment Policy and our Code of Conduct, which guide our interaction with suppliers, partners, customers and consumers worldwide. In 2017, there was significant progress resulting from improved supplier awareness of social compliance requirements and subsequent deployment of corrective actions to close audit findings. Buyer training programs on social compliance were expanded to increase awareness of forced labor, working conditions and safety risks in our supply chain. Within our Corporate Social Compliance program, key suppliers are identified through a risk-based approach to determine which will be subject to our audit requirements. Auditing resources are directed to areas with the most significant risks to identify gaps and opportunities for improvement in areas such as work hours and wages, discrimination, freedom of association, occupational safety, child labor and forced labor. Through the execution of our auditing program, we identify a number of Major Non-Conformance Findings each year, stated in our Social Compliance Audit Results table. In these situations, our first priority is to work with suppliers to remediate and verify that the nonconformance findings are resolved and therefore improve the conditions for the workers. Since its inception in 2012, the social compliance program has completed more than 866 audits, resulting in improved working conditions for more than 200,000 workers in our external supply chain. Our suppliers play a key role in this commitment. We regard our standard as a total supply chain initiative, and thus to be compliant, we expect our suppliers to pass these standards down to their suppliers to ensure conformance throughout the supply chain. Read more about how we partner with companies to promote safe and healthy work environments. in 2017, we Completed 238 Social Compliance audits in 177 Key Facilities Training Buyers to Support Safe, Fair Working Conditions in Our Supply Chain LATIN AMERICA We want to make sure all of our employees including supply chain workers are treated with respect and fairness and are able to work in a safe, healthy environment. We expanded our buyer training program in Latin America, reaching nearly 50 buyers in Argentina, Brazil, and Colombia. Read more 32 Kimberly-Clark 2017 Sustainability Report

33 Priority topic: SUPPLY CHAIN (continued) SOCIAL COMPLIANCE AUDIT RESULTS Number of in-scope suppliers Facilities Audited Kimberly-Clark Branded Audits Customer Branded Audits Kimberly-Clark Branded Audited Facilities Audited Facilities with Major Non-Conformance Findings Requiring Corrective Action Audited Facilities with Minor and Major Non-Conformance Findings, Total Non-Conformance Findings by Category (Kimberly-Clark Branded Audits Only): Health and Safety Child Labor Forced Labor Freedom of Association Discrimination % of in-scope suppliers % of in-scope suppliers 40 facilities (73 total major health and safety findings) 0 facilities (0 total major child labor findings) 6 facilities (7 total major forced labor findings) 0 facilities (0 total major freedom of association findings) 1 facility (1 total major discrimination finding) % of in-scope suppliers % of in-scope suppliers 38 facilities (92 total major health and safety findings) 0 facilities (0 total major child labor findings) 3 facilities (3 total major forced labor findings) 0 facilities (0 total major freedom of association findings) 0 facilities (0 total major discrimination findings) % of in-scope suppliers % of in-scope suppliers 48 facilities (126 total major health and safety findings) 0 facilities (0 total major child labor findings) 3 facilities (3 total major forced labor findings) 0 facilities (0 total major freedom of association findings) 1 facility (1 total major discrimination finding) % of in-scope suppliers % of in-scope suppliers 56 facilities (202 total major health and safety findings) 0 facilities (0 total major child labor findings) 7 facilities (7 total major forced labor findings) 0 facilities (0 total major freedom of association findings) 1 facility (1 total major discrimination finding) (1) Kimberly-Clark branded audits refer to audits measured against Kimberly-Clark compliance standards. (2) Customer branded audits refer to audits measured against customer-specific compliance standards. 33 Kimberly-Clark 2017 Sustainability Report

34 Priority topic: SUPPLY CHAIN (continued) 2017 PROGRESS Environmental Compliance Environmental team members from around the world collaborate to build capabilities, continuously improve our systems and standards and assess performance gaps in areas including air emissions, chemical management, water and wastewater treatment, waste management and beyond. Elements of the environmental compliance program include: Optimizing the implementation of our Environmental, Health and Safety (EHS) Management System and its policy, organization, planning and implementation elements. Modeling our EHS Management System with the ISO Standard. Deployment of the EHS Audit program. Conformance is verified by first, second or third party audits and corrective measures are tracked to closure. In 2017, we achieved our targets related to this program with 16 EHS audits conducted and on-time closure of more than 96% of environmental findings. 96% on-time closure of environmental findings 16 EHS Audits Conducted 2017 PROGRESS Occupational Safety Our safety vision is to realize an incident free workplace. While we are proud to have industry-leading performance in safety, we aspire to do better. Continuing to improve requires that we continue to check and adjust our approach and this year we introduced six key imperatives for the next phase of our REAL safety strategy and transformation. The Six Safety Imperatives: Address inconsistent safety leadership: Define leadership safety expectations so that all leaders model behavior that inspires the organization. Focus on positive safety interactions: Increase the frequency of authentic, caring safety interactions, role model behaviors and reinforce conformance to standards. Reduce risk tolerance: Improve knowledge and awareness to ensure that our team members make the right safety decisions every time. Empower employees and contractors to have safety impact: Provide employees and contractors with the knowledge and tools to own safety in their environment. Address inconsistent critical safety work practices: Ensure and check compliance with requirements so that every employee and contractor follows critical work practices every time. Align incentives and metrics: Utilize simple metrics and incentives to create focus and drive desired behaviors and choices. In 2017, our Total Reportable Incident Rate (TRIR) was Our TRIR improved by 17%. This is a clear indication that our focus on leading safety indicators and proactive risk reduction is helping us improve our incident rate performance. Regrettably, there was one fatality in 2017 involving a K-C de Mexico employee, as well as another fatality involving an external contractor in Asia Pacific. In light of this, as part of our Safety Imperatives Process, additional safety improvement initiatives are being launched in order to: 1) achieve consistent safety leadership across the enterprise; 2) reduce risk tolerance; and 3) promote contractor safety. REAL strategy Risk Mitigation EHS Management Systems Accountability for Safety Leadership in Safety Total Reportable Incident Rate (TRIR) Kimberly-Clark 2017 Sustainability Report

35 Priority topic: SUPPLY CHAIN (continued) KIMBERLY-CLARK EMPLOYEE SAFETY Fatalities Permanently disabling injuries Total Reportable Incident Rate (TRIR) North America Latin America Europe (EMEA starting in 2015) Middle East and Africa N/A N/A N/A Asia/Pacific Lost-time Reportable Incident Rate (LTRIR) North America Latin America Europe (EMEA starting in 2015) Middle East and Africa N/A N/A N/A Asia/Pacific Sentinel Events Reporting Rate (SERR) Safety compliance penalties $110,955 $4,800 $23,000 $1,000 $25,000 $4,500 $20,040 $18,000 (1) In 2013, a motor vehicle fatality occurred in the trucking operations of Kimberly-Clark de Mexico, an unconsolidated affiliate. (2) In 2016, there were zero fatalities involving Kimberly-Clark employees, however there were three fatalities involving contractors at a subsidiary of the partly-owned Kimberly-Clark de Mexico. One incident where an outside roofer suffered a fatal fall, another involving a contract security guard, and one where a third-party trucker was involved in a vehicle accident. (3) In 2015, the data for Europe was combined for reporting purposes as Europe, Middle East and Africa (EMEA). (4) In 2016, Kimberly-Clark Professional (KCP) reporting was combined into regional data. Therefore data was revised for 2014 and 2015 as it was previously reported out separately. (5) One fatality involving a K-C de Mexico employee. Note there was one additional fatality of a contractor (non-k-c employee) in Asia Pacific. TRIR: Work-related events that result in fatalities, temporary or permanently disabling injuries, or illnesses, per 200,000 hours worked per annum. LTRIR: Reportable injuries/illnesses that result in time away from work or restricted work, per 200,000 hours worked per annum. SERR: Number of Sentinel Events reported per 200,000 hours worked per annum. 35 Kimberly-Clark 2017 Sustainability Report

36 Priority topic: SUPPLY CHAIN (continued) Safety Made Essential GLOBAL KCP Sustainability is a key part of our commitment to create Exceptional Workplaces that are healthier, safer and more productive. All employees should be able to work safely, every day, and return home to their families. Read more 2017 PROGRESS Product Quality and Safety Ensuring quality is an essential part of Kimberly-Clark s business strategy, and a culture of quality is the foundation for meeting our customer and consumer expectations. It is the policy of Kimberly- Clark to design, manufacture and deliver products that meet or exceed customer and consumer expectations for quality performance and value. Each Kimberly-Clark business, function and facility is charged with aligning to enterprise standards and maintaining quality systems that support these expectations. From design and sourcing to manufacturing, commercialization, transportation, distribution and sales, quality is an important part of our entire process. External regulations and industry best practices, as well as internally developed standards, define our quality criteria. Programs are established to measure compliance with these and report results to senior management. These quality standards and established quality system processes drive the continuous improvement activities that ensure Kimberly-Clark products are safe and effective for consumers. Since the safety and wellbeing of those families that use our products is most important, we ve set a goal of reducing or eliminating ingredients of concern, and finding alternatives through our research and development efforts. Our Ingredient Transparency approach provides detailed ingredient information for our personal care products through our consumer care teams, and is also provided on our website for our North American brands. This information is accessible to all our stakeholders, including government, non-profit organizations, retailers and consumers. Our Product Stewardship Council continues to ensure new and existing products continue to meet or exceed safety, environmental, quality and sustainability requirements globally, while also meeting or exceeding consumer and customer expectations. This cross-functional group consists of colleagues from a variety of disciplines including sustainability, regulatory affairs, product safety, legal, engineering, government relations, global communications and our operating units. We created a set of Stewardship Standards for Suppliers, to clearly communicate our expectations to suppliers. Our expectation is for full material disclosure, so that we can maintain safety and regulatory compliance and proactively respond to emerging regulations and public concerns regarding the ingredients used in our products. 36 Kimberly-Clark 2017 Sustainability Report

37 Priority topic: SUPPLY CHAIN (continued) 2017 PROGRESS Supplier Collaboration We believe that long-term strategic supplier relationships are key to driving innovative solutions that meet our consumer and customer needs. Through our Supplier Collaboration Program, we are committed to becoming a Customer of Choice and partnering with key strategic suppliers. By working together, we are accelerating efforts to create value from source to shelf across our supply chain. To further enable collaboration with our external suppliers and other partners around sustainability, we: Expanded access to our sustainability data management system and worked closely with suppliers to begin the process of collecting performance data. We used this to collaborate for mutual benefits in areas including reducing Scope 3 greenhouse gas emissions, reducing the impacts of water stress on operations and communities, improving social compliance, and other areas of impact. Conducted sustainability risk assessments for global and regionally purchased materials and services. In deploying this activity, we ve identified actions in the areas of increased chemical transparency, expanded social compliance scope for labor categories, and expanded upon supplier risk assessment in due diligence processes. One example of supplier collaboration can best be demonstrated through our fiber supply chain and sourcing partner Fibria in Brazil. With much of the world s tissue and wood pulp production supplied by major global manufacturers, it is easy to assume the same is true for the supplying forests. While many forests are held by major companies or countries, smallholders, which are individual land owners, manage a significant amount of forest resources and their involvement in our supply chain is critical. Smallholders face challenges in achieving forest certifications, like FSC. This may be due to lack of knowledge about certification or lack of skills, tools and financial resources to achieve it. Both Kimberly-Clark and Fibria are working with NGOs like FSC and WWF to provide these resources and help develop a path to certification for smallholders that extends the reach of sustainable forestry. Spotlight on Kimberly-Clark's Eucalyptus Pulp supply Chain As large partners, Kimberly-Clark and Fibria recognize the future of sustainable forestry cannot leave smallholders out and the importance of maintaining a working forest for ongoing economic benefits and our supply chain. To illustrate our shared eucalyptus pulp supply chain, we have created an interactive map. Read more and access the interactive map. 37 Kimberly-Clark 2017 Sustainability Report

38 Governance our values and principles PROVIDE the foundation for how we work. Led by our Board of Directors and Executive Leadership Team, Kimberly Clark s governance structure guides our day-to day actions to ensure we conduct business with the highest standards and integrity, and remain committed to our values and guiding principles quality, service and fair dealing. This structure comprises: A Board of Directors and its committees to provide oversight and guidance. An independent Sustainability Advisory Board to provide counsel on key governance, social and environmental issues. A clear reporting structure and lines of accountability. A global Code of Conduct. Corporate policies and local procedures. We provide more detail on the Governance and Policy pages of our corporate website. 38 Kimberly-Clark 2017 Sustainability Report

39 Board of directors Our Board of Directors and its committees provide Oversight and guidance to our businesses and Our relationships with stakeholders. Our annual proxy statement contains detailed information on our Board and committee structure, the independence of the members and the responsibilities and meeting frequency of each committee. The Board has established and approved the framework for our policies and procedures. Among these are our policies relating to environmental stewardship, fiber sourcing, energy and greenhouse gas emissions, waste, product safety, charitable contributions, human rights, labor, diversity and inclusion and employment. As part of their oversight roles, the Board and the Nominating and Corporate Governance committee in particular receive regular reports from management on these topics, our goals, and progress against these goals. The Board also receives benchmarking reports on how our programs compare with those of other companies. Finally, the Board conducts a self-evaluation each year (as do each of its committees), to assess whether it is meeting its oversight responsibilities and to develop action plans for any opportunities identified. BOARD OF DIRECTORS DIVERSITY Independent members 92.3% 92.3% 91.7% 91.7% 91.7% 90.9% 91.7% 84.6% Women 23.1% 23.1% 25.0% 25.0% 25.0% 18.2% 25.0% 23.1% Minority group membership 23.1% 30.8% 33.3% 33.3% 33.3% 27.3% 33.3% 46.2% Total Board members Board of Directors of age (1) As of January, Mike Hsu, Kimberly-Clark s Chief Operating Officer, joined the Board of Directors. 39 Kimberly-Clark 2017 Sustainability Report

40 SUSTAINABILITY ADVISORY BOARD our Sustainability Advisory Board (SAB) PROVIDES relevant insights on sustainability issues. Our Sustainability Advisory Board is selected based on core competencies that align with our sustainability strategy. Its members offer independent views of our sustainability programs on a regular basis, as well as insights into potential risks and opportunities for our business. SAB members may serve for three consecutive two-year terms. Each member receives an annual stipend and is reimbursed for travel expenses to attend meetings MEMBERS: Mark Kramer (U.S.) Co-founder and Managing Director of Foundation Strategy Group (FSG); Senior Fellow in the CSR Initiative at Harvard Kennedy School of Government; and a lecturer on CSR at the Harvard Business School. Jo Mackness (U.S.) Chief Strategy and Operating Officer for the UC Berkeley Haas School of Business; previously served as the Executive Director of Haas Center for Responsible Business (CRB). Sally Uren (U.K.) Chief Executive for Forum For The Future, a global sustainability non profit that works with business, governments and others to catalyze interventions that move major systems towards sustainability. 40 Kimberly-Clark 2017 Sustainability Report

41 Ethics & compliance Our Code of Conduct and related policies create a framework of ethical standards within which all employees and suppliers must operate. Our Global Ethics & Compliance Program (the Program ), which supports the Code, educates employees that we expect consistent, ethical behavior and compliance with applicable laws and that we hold employees accountable. We also expect our employees and suppliers to speak up and ask questions or raise concerns. Our commitment to high ethical standards means identifying and managing risks as well as seizing opportunities. The Program also includes our anti-corruption policies and procedures, which are designed to ensure compliance with global anti-corruption standards, including the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act. A discussion on our Social and Environmental Compliance efforts can be found in the Supply Chain section of this report. Our Code of Conduct and a list of our policies can be found in the Governance section of our website. 41 Kimberly-Clark 2017 Sustainability Report

42 DIVERSITY & INCLUSION WE SEEK TO HAVE A WORKFORCE THAT REFLECTS OUR CONSUMER BASE. Through our People Philosophy, we work to attract and retain great people from diverse backgrounds and perspectives. This focus has helped build teams united by a passion to win and a desire to make a difference. Increasing the representation of women (globally) and ethnic minorities (U.S.) in senior management positions (defined as Director-level and above) and ensuring a robust pipeline of diverse talent is part of our ongoing people strategy. Talent development Developing leaders and top talent is critical, so we value a work environment that fosters personal, professional and corporate growth while building a performance-driven organization to attract, engage, develop, reward and retain top talent. To ensure our leaders are ready for more senior roles, we ve implemented several programs including Culture of Coaching, General Manager Acceleration Development, Leaders Teaching Leaders (LTL) and the Emerging Leader Acceleration Program (ELAP) to ensure they have the necessary experience and training. Also, our Technical Leader Pipeline Development Program helps confirm our commitment to innovation and new ideas that add value to our business. 100% on the Human Rights Campaign (HRC) Foundations 2017 and 2018 Corporate Equality Index (CEI) Kimberly-Clark earned a perfect score on the annual benchmarking survey and report on corporate policies and practices pertinent to lesbian, gay, bisexual and transgender (LGBT) employees. Tammie Fallows, Electrical Technician at Kimberly-Clark s Barrow mill, is passionate about helping young women pursue careers in engineering. 42 Kimberly-Clark 2017 Sustainability Report

43 DIVERSITY & INCLUSION (Continued) FULL-TIME EMPLOYEES North America1 21,176 21,411 22,241 21,766 14,874 15,374 14,615 14,222 % of total1 37% 38% 38% 38% 35% 36% 35% 34% Latin America1 13,496 13,829 14,235 14,479 12,824 13,046 12,209 12,307 % of total1 24% 24% 24% 26% 30% 30% 29% 29% Europe, Middle East and Africa 8,626 8,222 8,039 6,872 6,780 6,708 6,884 7,132 % of total 15% 14% 14% 12% 16% 16% 16% 17% Asia/Pacific 13,973 13,789 13,825 13,631 8,139 8,005 8,142 8,372 % of total 24% 24% 24% 24% 19% 18% 19% 20% Total full-time employees 57,271 57,251 58,340 56,748 42,617 43,133 41,850 42,033 (1) Restated data history to report Mexico as part of North America (instead of Latin America) for a geographical view. TURNOVER (GLOBAL) Total 6.4% 10.1% 9.9% 10.1% 11.0% 16.5% 16.1% 12.9% Voluntary 4.3% 5.2% 5.8% 7.4% 8.0% 10.3% 9.7% 9.6% Involuntary 2.1% 4.9% 4.2% 2.8% 3.0% 6.2% 6.4% 3.2% (1) reported U.S. turnover only. (2) Beginning in 2015, turnover rate data is Global. FULL-TIME EMPLOYEE DIVERSITY Women 29.9% 30.1% 31.0% 35.6% 31.8% 32.2% 31.8% 30.5% Women in management 27.3% 28.6% 29.3% 30.3% 31.1% 32.0% 33.0% 33.8% Ethnic minorities (US) 17.8% 17.9% 18.8% 18.7% 17.7% 18.9% 18.5% 19.2% Ethnic minorities in management (US) 10.9% 11.3% 11.7% 13.7% 12.2% 12.7% 13.2% 13.9% (1) Through 2013, Management was defined as U.S. employees in EEP category 01 (executive/senior-level officials and managers, and first/middle-level officials and managers). In 2014, we revised our corporate definition for women and ethnic minorities in management to include employees identified as Manager in Kimberly-Clark's Workday system (previously, the term was defined as executive/senior level officials and managers as well as first/middle level officials and managers). This change enables us to report on gender representation in management globally and aligns with our internal reporting structures. UNION MEMBERSHIP Percentage of Employees with union membership 27% 25% 25% 25% 26% 21%1 21%1 21%1 (1) The percentage of unionized workers is approximately 21% of our workforce. However, in many countries, union membership is considered a private matter and may not be tracked for those countries. Furthermore employees who are not union members are covered by union agreements. 43 Kimberly-Clark 2017 Sustainability Report

44 MATERIALITY ASSESSMENT, REPORT DEVELOPMENT AND STAKEHOLDER ENGAGEMENT Sustainability topics identified through materiality Assessment help focus our efforts. MATERIALITY ASSESSMENT The Global Reporting Initiative s (GRI) materiality principle states that a sustainability report should cover aspects that: Reflect the organization s significant economic, environmental and social impacts; or Substantively influence the assessments and decisions of stakeholders. We conducted a non-financial materiality assessment to determine topics deemed most important to both internal and external stakeholders. The materiality assessment results inform our sustainability strategies and ensure we provide transparent, comprehensive and accessible coverage of topics that are of significant importance to key stakeholders and reflect the organization s significant economic, environmental and social impacts on the business. ONGOING STAKEHOLDER ENGAGEMENT In addition to our materiality assessment process, we engage with stakeholders in many ways on an ongoing basis ranging from conducting customer and consumer research to engaging in dialogue and developing strategic partnerships with environmental and humanitarian organizations. In addition, we communicate progress to the shareholder and investment communities through our Annual 10-K, through investor and shareholder meetings, at analyst-sponsored conferences and through distribution of our sustainability reporting content. 44 Kimberly-Clark 2017 Sustainability Report